Chip Sales Boom in May

LONDON -- The three-month average for global chip sales in May was $24.70 billion, an increase of 4.6 percent from the previous month, according to the Semiconductor Industry Association (SIA), which reports numbers compiled by the World Semiconductor Trade Statistics (WSTS) organization. The jump in sales was the largest sequential monthly increase in sales since March 2010, the SIA said.

The averaged sales for May were ahead of analysts' expectations (see Global Chip Sales Buoyed by Phones, Memories). Bruce Diesen, an analyst with Carnegie Group, had predicted the three-month average figure for May would come in at $23.9 billion, which would still have represented strong sequential growth.

The increase was driven by a sharp uptick in activity in the Americas and Asia-Pacific regions.

Global sales in May 2013 were up 1.3 percent compared with the same month a year before and year-to-date sales were 1.5 percent higher than they were at the same point in 2012. With a strong second half for the year forecast the flat-to-down full-year forecasts for chip market growth are looking hard to square with the latest data.

Monthly data is given by the SIA as a three-month average, although the source of the data, WSTS, tracks actual monthly data. The SIA and other regional semiconductor industry bodies opt to use averaged data because it smoothes out the actual data that typically show troughs at the beginnings of the quarters and peaks at the ends of the quarters.

Compared to May 2012, sales in May 2013 increased in Asia Pacific by 5.8 percent, in the Americas region by 3.0 percent, and in Europe by 0.1 percent. The exception to the strong growth was Japan where sales were $2.75 billion, down 18.4 percent from a year before (see table below). The steep Japanese fall was largely due to the devaluation of the Japanese yen.

Click on image to enlarge.

April 2013 three-month average sales (in dollar-billions) compared on a yearly, monthly, and previous-quarter basis. (Source: SIA and WSTS)

"May was an unambiguously strong month for the global semiconductor industry, with growth across all regions and particularly encouraging increases in the Americas and Asia Pacific," said Brian Toohey, CEO of the SIA, in a statement. Global sales have stayed ahead of those 2012 throughout the year, he added.

Truly the world is back to the days of buying electronics. When consumer confidence goes up, we are certain they will buy more gizmos and that translates to sale of chips. Our industry is very healthy. And it is becoming harder for new entrants to get into the game owing to the complexity of the supply chain.

>> It it good to see that orders are increasing. I hope it is not just a one month thing but a trend going forward.

Only a booming economy will guarantee that. If people are not buying gadgets and products, orders will drop. Electronics helps us to see the interconnected nature of global business, economy and supply chain.

I expect that car sales will go up a little since most in the US have been putting off replacing their vehicles. The jobs report seems to be showing some inprovement. I also expect that today's vehicles will have more electronics with all the new federal requirments and new infotainment choices.

That is true. This has been a season of many regulations and that is good business for some and bad for others. But generally, innovation is alive in the auto industry and it will help the OEMs that supply the electronics in new vehicles.